Lease purchase building plan moves ahead despite Heller’s opposition

Plans to build a new home for the state Department of Conservation and Natural Resources moved another step forward Tuesday despite opposition by Secretary of State Dean Heller.

The treasurer’s office and Public Works Board have worked on the plan for two years. Instead of selling bonds to put up the $19.2 million building, the idea is to have Jacobsen Construction build the 120,000-square-foot structure to state specifications under a lease-purchase agreement with the state.

The idea, proposed by Gov. Kenny Guinn and Treasurer Brian Krolicki several years ago, is to use the money the state now pays to rent space for state agencies to, in effect, pay a mortgage every month.

Guinn has said repeatedly it saves the state money, gets away from the expensive practice of renting space and provides badly needed office space the state can’t afford to build with bonds.

Krolicki said the state now spends up to $20 million a year to rent office space. He said rolling that into lease-purchase agreements could provide the state with up to $300 million in construction “without spending any additional state money.”

Heller agreed that “the way we’re doing it now is basically throwing money down a hole.”

But he said he can’t support the lease-purchase plan because Nevada voters rejected the idea in 1994.

Krolicki said the Nevada Supreme Court ruled two years ago that the lease-purchase plan is constitutional. He said he can’t imagine voters objecting now to a plan that gets badly needed state office space without costing taxpayers more money.

Guinn agreed with Krolicki, saying, “I don’t know any way we would lose on this deal.”

“I’m not questioning the legality of it,” said Heller.

He said the problem is that on the 1994 ballot, voters rejected Question 5, which asked whether they wanted to lift the ban on lease-purchase agreements.

The argument for passage said it would give the state more flexibility in financing large projects and make it easier for the state to privatize some governmental facilities and services.

The argument against passage expressed concerns the proposed amendment would let the state bypass constitutional debt limitations and prove more expensive to taxpayers in the long run.